Summary
The unfair treatment of consumers by businesses is not successfully regulated as responsibility is widespread among numerous departments and is irregularly examined, a report has found.
The National Audit Office (NAO) report 'Protecting Consumers - The System for Enforcing Consumer Law: Department for Business, Innovation and Skills, the Office of Fair Trading and Local Authority Trading Standards Services’ (HC 1087) details that consumer detriment is costing billions of pounds each year but the system for enforcing consumer law is not delivering value for money.
The overall scale of this so-called 'consumer detriment', ranging from pressure selling to systematic scams by criminals and particularly that caused by doorstep crime, is not being properly evaluated, leading to the inefficient allocation of resources.
Although much detriment occurs at the regional and national level, incentives are weighted against a coordinated approach which goes beyond local areas. While there are no reliable figures, NAO estimates the cost of detriment which cannot be tackled at local level is more than £4.8 billion each year.
Central government provides annual funding of £34 million to tackle crime which crosses the borders between local authorities, but this is relatively low compared to the scale of the problem. The Department for Business, Innovation and Skills estimates that the annual funding for Trading Standards Services will reduce from £213 million to about £140 million-£170 million by 2014, affecting action to address this problem.
The framework for prioritising and allocating cases, introduced by the Office of Fair Trading (OFT), is not being applied as intended. But formal structures for supporting the model are not in place in seven of the 11 regions, and there is still a lack of clarity over who should be taking cases forward. As a result, the OFT has been able to take enforcement action on only two of the 15 cases referred to it in the last two years.
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